Section 1. K.S.A. 46-1106 is hereby
amended to read as follows: 46-
1106. (a) (1) A financial-compliance audit shall be
conducted each year
of the general purpose financial statements prepared by the
division of
accounts and reports for its annual financial report. This audit
shall be
conducted in accordance with generally accepted governmental
auditing
standards. The resulting written audit report shall be issued as
soon after
the end of the fiscal year as is practicable.

(2) In addition, separate written
audit reports on the financial man-
agement practices of the office of the state treasurer and the
pooled
money investment board shall be prepared addressing the adequacy
of
financial management practices and compliance with applicable
state
laws. The separate audit of the pooled money investment board
also shallinclude a comparative investment performance review and an
analysis ofthe investment program, including an evaluation of investment
policiesand practices and of specific investments in the pooled money
investmentportfolio. The analysis of the specific investments in the
pooled moneyinvestment portfolio shall review whether such investments meet
the in-vestment priorities of safety, liquidity and performance. The
performanceof such investments shall be measured by comparison to an
appropriatemarket index.

(3) Copies of
suchthe reports of audits conducted
pursuant to thissubsection (a) shall be furnished to the governor, director
of accounts and
reports, director of the budget, each state agency, the legislative
post audit
committee and other persons or agencies as may be required by law
or
by the specifications of the audit.

(4) Any additional costs
associated with preparing the separate ad-
ditional reports on the office of the state treasurer and the
pooled money
investment board shall be borne by the office of the state
treasurer and
the pooled money investment board in accordance with K.S.A.
46-1121,
and amendments thereto.

(b) Including financial-compliance audit
work conducted as part of
the audit conducted pursuant to subsection (a),
financial-compliance au-
dit work shall be conducted at each state agency at least once
every three
years as directed by the legislative post audit committee. Written
reports
on the results of such auditing shall be furnished to the governor,
director
of accounts and reports, director of the budget, the state agency
which is
audited, the legislative post audit committee and such other
persons or
agencies as may be required by law or by the specifications of the
audit.

(c) Books and accounts of the state
treasurer and the director of
accounts and reports, including the bond register of the state
treasurer,
may be examined monthly if the legislative post audit committee so
de-
termines, and such examination may include detailed checking of
every
transaction or test checking.

Any person receiving tax information under the
provisions of subsec-
tion (a) or (b) shall be subject to the same duty of
confidentiality imposed
by law upon the personnel of the department of revenue and shall
be
subject to any civil or criminal penalties imposed by law for
violations of
such duty of confidentiality.

(d) The post auditor shall report
immediately in writing to the leg-
islative post audit committee, governor and attorney general
whenever it
appears in the opinion of the post auditor that there may have
occurred
any violation of penal statutes or any instances of misfeasance,
malfea-
sance or nonfeasance by a public officer or employee disclosed by
any
audit or audit work conducted under the legislative post audit act.
The
post auditor shall furnish the attorney general all information in
the pos-
session of the post auditor relative to any report referred to the
attorney
general. The attorney general shall institute and prosecute civil
proceed-
ings against any such delinquent officer or employee, or upon such
officer
or employee's official bond, or both, as may be needed to recover
for the
state any funds or other assets misappropriated. The attorney
general shall
also prosecute such ouster and criminal proceedings as the evidence
in
the case warrants. Any person receiving tax information under the
pro-
visions of this subsection shall be subject to the same duty of
confiden-
tiality imposed by law upon the personnel of the department of
revenue
and shall be subject to any civil or criminal penalties imposed by
law for
violations of such duty of confidentiality.

(e) The post auditor shall immediately
report to the committee on
surety bonds and insurance when any audit or audit work conducted
un-
der the legislative post audit act discloses a shortage in the
accounts of
any state agency, officer or employee.

(f) In the discharge of the duties
imposed under the legislative post
audit act, the post auditor may require state agencies to preserve
and
make available their accounts, records, documents, vouchers,
requisitions,
payrolls, canceled checks or vouchers and coupons, and other
evidence
of financial transactions.

(g) In the discharge of the duties
imposed under the legislative post
audit act, the post auditor or firm conducting a
financial-compliance audit
or conducting other financial-compliance audit work shall have
access to
all books, accounts, records, files, documents and correspondence,
con-
fidential or otherwise, of any person or state agency subject to
the legis-
lative post audit act or in the custody of any such person or state
agency.
Except as otherwise provided in this subsection, the post auditor
or firm
conducting a financial-compliance audit or other
financial-compliance au-
dit work and all employees and former employees of the division of
post
audit or firm performing a financial-compliance audit or other
financial-
compliance audit work shall be subject to the same duty of
confidentiality
imposed by law on any such person or state agency with regard to
any
such books, accounts, records, files, documents and correspondence,
and
any information contained therein, and shall be subject to any
civil or
criminal penalties imposed by law for violations of such duty of
confiden-
tiality. The duty of confidentiality imposed on the post auditor
and on
firms conducting financial-compliance audits or other
financial-compli-
ance audit work and all employees of the division of post audit and
all
employees of such firms shall be subject to the provisions of
subsection
(d), and the post auditor may furnish all such books, accounts,
records,
files, documents and correspondence, and any information
contained
therein to the attorney general pursuant to subsection (d). Upon
receipt
thereof, the attorney general and all assistant attorneys general
and all
other employees and former employees of the office of attorney
general
shall be subject to the same duty of confidentiality with the
exceptions
that any such information contained therein may be disclosed in
civil
proceedings, ouster proceedings and criminal proceedings which may
be
instituted and prosecuted by the attorney general in accordance
with sub-
section (d), and any such books, accounts, records, files,
documents and
correspondence furnished to the attorney general in accordance with
sub-
section (d) may be entered into evidence in any such proceedings.
Noth-
ing in this subsection shall be construed to supersede any
requirement
of federal law.

(h) Any firm or firms which develop
information in the course of
conducting a financial-compliance audit or other
financial-compliance au-
dit work which the post auditor is required to report under
subsection
(d) or (e) shall immediately report such information to the post
auditor.
The post auditor shall then make the report required in subsection
(d) or
(e).